BEIJING, (Reuters) – U.S.-based electric vehicle manufacturer Tesla (NASDAQ) Inc announced Monday that it has built a research and data center in Shanghai. This is where the company manufactures Model 3 sedans as well as Model Y sport-utility cars.

According to a statement, the Tesla Research and Development Center, which is Tesla’s first center outside of the United States, has software engineers, electronic and material experts, and also charges.

Tesla’s factory operations will be kept locally in the new data centre. China’s ministry of industry published draft regulations last month that will require local storage for important industry data.

The statement states that Tesla’s research team made some adjustments and tweaks to software during a global chip shortage.

Tesla did not however say whether they use less chips in their vehicles.

Tesla stated in May it had set up a China site for car data storage in line with its separate regulations. China’s ongoing crackdown against the industry has made data policy a major area of concern.

China’s 2017 cybersecurity law is a continuation of China’s China data security law. This law governed the storage and transmission of Chinese-derived data.